Will State Lawmakers Heed New SBA Data, Small Business Concerns?

Jan. 26, 2012

There’s more evidence that small business plays a pivotal role in creating jobs in Washington and other states, according to the Office of Advocacy in the Small Business Administration (SBA). The Office of Advocacy released small business data for each of the 50 states.

SBA believes the new data is “an invaluable resource for small businesses, legislators, academics, government officials, and policymakers in each state.”

Why?

“Small businesses are the foundation of economic growth in Washington and in our nation” said Dr. Winslow Sargeant, Chief Counsel for Advocacy. “By supporting policies that promote innovation and entrepreneurship, we help small businesses tackle these challenging economic times. These statistics are a resource for a path to economic growth.”

As for Washington state, the report explains “small business employment; business starts and closings; bank lending; business ownership by minorities, women, and veterans; and firm and employment change by major industry and firm size.”

Salient data about small business:

  • There were 532,162 small businesses in Washington in 2009. Of these, 142,854 were employers and they accounted for 53.3 percent of private sector jobs in the state. Small firms made up 98.1 percent of the state’s employers.
  • Throughout 2010, the number of opening establishments was lower than closing establishments and the net employment change from this turnover was negative.
  • Washington’s real gross state product increased 0.7 percent and private-sector employment decreased 1.8 percent in 2010. By comparison, real GDP in the United States decreased 1.3 percent and private sector employment declined by 0.8 percent.
  • Self-employment in Washington surged over the last decade. Female self-employment fared the best compared with other demographic groups during the decade.

To promote entrepreneurship, this week the Washington Policy Center sent state lawmakers in the 2012 legislative session these recommendations:

  1. Revisit the voluntary settlement agreement as passed by the state Senate in 2011 – $1.2 billion
  2. Reform the displaced worker retraining program
  3. Simplify sales taxes by using an ‘origin based’ tax (as opposed to a ‘destination based’ tax) and creating a flat rate for out-of-state businesses
  4. Review regulations to ensure that Washington rules don’t exceed federal regulations
  5. Enact Tort Reform
  6. Do no harm in transportation policy – do not reduce road lane capacity
  7. Do not follow Seattle in enacting statewide paid sick leave

In addition, Gov. Gregoire suggested her strategies to aid small business — business and occupation tax relief.

How has the Legislature responded? Lawmakers have ignored their $1.5 budget-deficit crisis.

Instead, lawmakers are considering other matters – mandating paid sick leave and safe leave, banning plastic bags, abolishing the death penalty and gay marriage.

When will Washington’s Legislature demonstrate wisdom?

From the Coach’s Corner, also read:

WPC Hits Target, but Will Washington State Legislature?

Washington: A Balanced Budget Is No Longer Enough

Does the Federal Reserve Understand Small Business?

Knowledge is knowing a tomato is a fruit.  Wisdom is not putting it in a fruit salad. 

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

Budget Debate: Will Legislature Read Seattle News Media Headlines?

Nov. 28, 2011

The headline on the Seattle PI Web site was startling. It read: “FACT CHECK: Has Wash. cut budget by $10.5B? Hardly.”

The headline and accompanying story questioned what appear to be misrepresentations by Gov. Chris Gregoire when she claimed Washington has slashed $10.8 billion from the state budget in the last three years. The cuts were her justification for proposing a sales tax increase to balance the budget.

My hope in the budget debate is that the Legislature will read such Seattle media headlines, as they meet in a special session this week to debate the budget deficit.

(Actually, the story appeared in the Seattle PI an hour after it first appeared in the Seattle Times. But, inexplicably, the Seattle Times deleted the story less than an hour after the PI story appeared.)

Reporter Mike Baker documented how the hundreds of so-called cuts are really spending increases that haven’t been implemented.

For example, the alleged cuts include:

  • $682 million in cost-of- living increases for education employees
  • $344 million in cost-of-living hikes for pensions
  • $1 billion in education cuts, but it hasn’t really been slashed because of student tuition increases
  • $128 million for an education apportionment payment, but the payment has actually been doled out
  • $69 million for state parks, but in reality the state took in that amount from user fees

Mr. Baker also reminded us that the state is ready to spend around $30 billion from the general fund budget. That’s more money than was spent in the more-recent budget cycle.

Because it was an Associate Press story, it soon appeared on 54 media sites.

The sales tax proposal is controversial for good reason, and why the sales tax debate erupted in Washington state.

Public officials have long violated good government standards on transparency and in spending. On multiple occasions, this column has called for reform and wondered why not transparency for good, open government in Washington state?

We need better public policy – here are a couple of examples:

  • Proposing to cut $160 million from state colleges and universities is unconscionable.
  • Special interests such as the Washington Federation of State Employees should be reasonable and agree to renegotiate labor contracts.

It’s easy to conclude from the Associated Press story that Washington state has a spending problem, not a revenue problem. For example, the State Auditor revealed state government spends $1.8 million for nearly 6,700 unused cell phones is only one example. We need more public officials to create a favorable economic environment.

Given the economy and continuous budget crises, Washington legislators should finally start compromising, stop the longtime practice of shell games and launch legitimate reform. Only then, will thoughtful businesspeople and voters trust Washington state government and consider a sales tax increase.

So, in the budget debate: Will the Legislature read the Seattle news media headlines? It’s time for good government.

From the Coach’s Corner, furthermore, the state can create more tax revenue if it encourages entrepreneurship to create jobs. Here’s What Small Business Owners Need from Washington State Policymakers.

Here’s another no-brainer: How Washington Fails in Filmmaking for Economic Development.

“Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.

-George Washington

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Columnist Terry Corbell is a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

Seattle business consultant Terry Corbell provides high-performance management services and strategies.